Postmedia to shut down Sunday papers in Edmonton, Ottawa and Calgary while moving more print production to centralized Hamilton operation.

Postmedia newspapers are shutting down Sunday papers in Ottawa, Edmonton and Calgary while moving more print production to Hamilton site. Job losses are expected, with about 20 anticipated in Montreal alone.

By:Dana FlavelleBusiness Reporter, Published on Mon May 28 2012

Canada’s largest daily newspaper chain will lay off some staff, centralize more operations and cease Sunday print publication in three major markets, Postmedia Network has confirmed.

In addition, its flagship publication, the National Post, will stop producing a print edition on Mondays for at least the summer and perhaps longer, the Toronto-based company also said.

Unlike its competitors, Postmedia is also servicing a large $516 million debt, the legacy of several ownership changes that began when Conrad Black sold the former Southam chain for a record $3.2 billion to the Asper family in 2000.

Godfrey said the cost-cutting had less to do with debt repayment and more to do with cutting print costs in order to invest in digital platforms. Readers will continue to be served online, he said.

“We’re no different from the rest of the industry,” Godfrey said, noting that the Globe and Mail recently announced it is seeking voluntary unpaid three-month leaves from 80 staff members in order to reduce costs. “The publisher of the Globe and Mail said it was the worst April ever. We can sympathize with him.”

Citing an industry-wide fall in advertising revenue, the Globe has also moved up plans to introduce a paywall on the newspaper’s website, where readers would be required to pay for stories beyond a certain monthly minimum.

“We know that print advertising revenue decline is ongoing across the industry. And a lot of the lost revenue in Canada is going to foreign-owned and controlled digital companies who, without any regulation, are accessing Canadian audiences and eroding Canadian media revenues,” Godfrey wrote in a memo to staff.

He was referring to Google, Facebook and the Huffington Post, he said in a later interview, noting they’re exempt from regulations that require newspaper publishers to be majority Canadian owned in order for advertisers to qualify for a tax break.

When asked if he could foresee a day when Postmedia would cease print editions completely, Godfrey said: “Absolutely not.”

The three Sunday papers affected include The Citizen in Ottawa, the Herald in Calgary and the Journal in Edmonton, the company said.

The changes, which will take place over the coming weeks, were announced in an internal note to Postmedia’s 4,000 employees Monday.

It was not immediately clear how many employees would be affected.

More than 20 positions will be removed from The Gazette newsroom, according to an internal memo to staff from publisher Alan Allnutt.

The union representing Postmedia journalists at The Vancouver Sun and The Province decried the cuts saying it will lead to a “vicious cycle” of declining quality and reduced readership.

“The big concern we have is that it may lead to a continuing frittering away of the quality of the newspaper and that will lead to further declines in circulation. It’s a vicious cycle,” said Mike Bocking, a representative with the Communication Energy and Paperworkers union.

“We know all about the struggle to find the new revenue model for print journalism and no one seems to have found it yet. One thing we do know is cutting newsroom staff to profitability will hurt us in the long term,” Bocking added.

A key piece of the announcement would see the company move more newspaper print production functions to its centralized service desk in Hamilton, Postmedia Page Editorial Services.

About 100 full and part-time non-union employees currently lay out the pages for some Postmedia newspapers.

In addition to page layout and pagination, the Hamilton service will assume copy editing functions, the company said.

“We’re further expanding to accommodate all editorial production of all our newspaper pages, allowing our newspaper to concentrate on local content with respect to sports and local news,” Godfrey said.

Some pages, especially those containing world and national news, could eventually be common to all papers in the chain, he said.

In Ottawa, The Citizen will cease Sunday publication in mid-July while Edmonton will publish its last Sunday edition on June 24. The Calgary Herald would cease Sunday publication in late July, Godfrey said.

Postmedia, which issued public shares last June, has seen its stock price plummet from a high of $17.75 a share last June 24 to a low of $1.26 on this May 3. It closed at $1.35 Monday.

The Toronto-based newspaper publisher reported a loss of $11.1 million for the quarter ended Feb. 29, 2012. Revenue fell 7.6 per cent to $198.6 million.

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